By Jabulani Simplisio Chibaya
HARARE – CFI Holdings Limited, is attempting to rewrite its script after a year of significant transition. The company is moving from survival mode to a strategic reset, prompting the question of whether the turnaround is real.
In a financial year defined by tight liquidity, a volatile currency transition, and intense competition from Zimbabwe’s informal sector, CFI Holdings delivered something it had not produced in years: a profit. After consecutive periods of deep losses, the group reported an inflation-adjusted profit before tax of ZWG448.3 million for FY2025. This performance contrasts sharply with the ZWG 875 million loss recorded in 2024. For a company with roots stretching back to 1908—evolving from maize exports to London into a modern agribusiness involved in retail, milling, farming, and property—this result marks more than just a numerical recovery; it signals a structural pivot. However, the critical question remains whether this signals a durable investment case.
The group’s recovery was not driven by revenue growth. Revenue declined modestly by 5.46% to ZWG2.72 billion. Instead, profitability was restored largely through a swing from a ZWG 877 million unrealised exchange loss in 2024 to a ZWG448 million unrealised exchange gain in 2025. In Zimbabwe’s hyperinflationary reporting environment, which is compliant with IAS 29, exchange rate effects can dominate earnings. In CFI’s case, the devaluation of foreign-denominated loans turned into an accounting tailwind. While operating performance did improve, the headline profit was partly influenced by currency dynamics rather than purely operational muscle. However, operating cash flow tells a stronger story, with ZWG473.6 million generated compared to a ZWG477.6 million cash burn in 2024. This shift is fundamental, as earnings backed by cash signal credibility.
CFI’s balance sheet has undergone significant repair. In 2024, the group’s debt-to-equity ratio stood at a staggering 345.8%, which is considered financial distress territory. In 2025, that ratio fell dramatically to 85.8%. This was achieved through improved earnings, a reduction in net borrowings, and equity rebuilding, which saw net asset value rise from ZWG335.8 million to ZWG892.0 million. Furthermore, the equity-to-total-assets ratio improved from 11.6% to 34.1%, representing structural deleveraging rather than a cosmetic shift. Interest cover also moved from deeply negative to 7.45 times, meaning operating profit now comfortably services finance costs. This is the clearest sign of turnaround maturity.
The company’s return ratios have also moved from destruction to creation. The return on equity now stands at 19.7%, a dramatic recovery from -296.6%. The return on assets is 6.7%, up from -34.5%, while the return on capital employed is an attractive 35.3%. However, one must question whether these returns are repeatable in the absence of currency gains.
A look at the group’s divisional performance reveals a mixed operating picture. CFI’s revenue composition shows that retail, comprising Farm and City and Vetco, makes up 83.5% of revenue. Milling and food manufacturing contributes 13%, farming accounts for 2.8%, and properties make up 0.7%. In the retail division, Farm and City volumes rose by 19%, benefiting from improved rainfall and a recovery in agricultural demand following the El Niño drought. However, margins remain pressured by informal traders operating with a tax advantage, liquidity constraints in the economy, and the cost burdens of operating in the formal sector. As a result, retail is described as volume-resilient but margin-fragile.
The milling division, which operates as Victoria Foods, faced operational headwinds and saw a 26% performance decline. This was due to power disruptions, spikes in raw material costs, and drought-driven grain shortages. Despite this, capital expenditure of ZWG84.8 million was directed toward retooling and plant spares. Management is betting on a regional harvest recovery and improved procurement sharpness to rebuild margins. If grain procurement discipline improves, milling could become a profit engine for the group.
The farming division, through Glenara Estates, saw stabilized crop and livestock operations. While farming remains small in revenue contribution, it is strategically critical for vertical integration and cost hedging. Meanwhile, the properties division is playing the long game. Supreme Court and Constitutional Court victories over land disputes at Saturday Retreat Estate have unlocked long-term housing development potential aligned with the government’s Vision 2030. While property development is not contributing to earnings today, it could become a capital appreciation story tomorrow.
Liquidity and working capital have also improved, with the current ratio rising to 128.8%, suggesting acceptable short-term coverage. However, net cash resources remain negative at ZWG-715.6 million, meaning the group is still reliant on net borrowing. No dividend was declared, reflecting prudent capital conservation.
The corporate finance strategy appears threefold: to deleverage aggressively, to retool manufacturing for competitiveness, and to unlock land bank value over time. This is a capital preservation and repositioning phase, not an expansion binge. Capex discipline, combined with improved operating cash flow, suggests cautious financial stewardship.
From a valuation perspective, the net asset value per share is ZWG8.35, while the market price is ZWG5.39. This means the stock trades at roughly 0.65 times NAV, indicating market skepticism, a discount for execution risk, and a Zimbabwe macro risk premium. If turnaround credibility builds, this discount could narrow.
The macro environment matters significantly for CFI. The operating environment improved due to monetary tightening, stabilization of the new ZiG currency, strong gold prices, and improved rainfall. However, risks remain, including the dominance of the informal sector, policy unpredictability, a persistent liquidity crunch, and a medium-term IMF growth slowdown forecast. CFI’s fate remains tightly coupled to agricultural cycles and monetary stability.
Looking forward, investors should watch for operating profit excluding FX gains, sustained positive operating cash flow, the debt reduction trajectory, milling margin recovery, retail margin resilience against informal competition, and progress on land bank monetisation. The key question is whether profitability will hold if FX volatility reverses.
On the ESG front, CFI has embedded sustainability into its reporting under GRI standards. Solar rollouts at 29 of 54 branches, water monitoring, and renewable investments reflect cost-saving pragmatism rather than mere compliance. In a high-energy-cost economy, sustainability doubles as financial strategy.
So, is it a good investment?
The bull case points to structural deleveraging underway, positive cash generation, a 35% ROCE, a stock trading below NAV, property upside optionality, and agriculture rebound tailwinds. The bear case highlights that profit was heavily influenced by unrealised FX gains, net debt remains significant, the informal sector is eroding margins, Zimbabwe’s macro volatility persists, and there is no dividend yet.
The verdict is that CFI Holdings is no longer in survival mode; it is in rehabilitation mode. This is not yet a growth compounder, but it is a credible turnaround candidate. For risk-tolerant investors comfortable with Zimbabwe exposure and cyclical agriculture plays, CFI offers deep value with execution risk. For conservative investors seeking stable dividend yield and macro insulation, caution remains warranted. The story is shifting, but it is not yet fully rewritten. In Zimbabwe’s volatile economy, that distinction matters.
Jabulani Simplisio Chibaya is a Data and AI Consultant specializing in data science, artificial intelligence, blockchain, and cryptocurrency innovation. A seasoned conference speaker, he also writes on the intersection of technology, regulation, and economic development. Contact: Cell: +263 778 921 881, Email: simplisiochibaya22@gmail.com, LinkedIn: https://www.linkedin.com/in/jabulani-simplisio-chibaya
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